Home sales spike in November

Buyers in the Baltimore region snapped up homes in November as interest rates jumped up, prices rose and the number of homes for sale declined, according to a new study released Monday.

Home sales in Baltimore City and the five surrounding counties surged to 2,863, up more than 20 percent from November 2015, the research firm ShowingTime RBI reported. Pending contracts also climbed more than 10 percent, topping 3,300 — the highest level for November in a decade, according to the study, which is based on listing activity from the MRIS regional listing service.

Analysts attributed the sales growth to a range of factors, including rising incomes and relatively warm weather that prolonged the fall season. The anticipation of rising interest rates probably pushed many buyers as well.

Federal Reserve officials have talked for months about possibly increasing interest rates at the December meeting of its board of governors, which got underway Monday.

Already interest rates on 30-year mortgages have jumped from around 3.5 percent to about 4 percent after Donald Trump won the presidential election as markets anticipated more inflationary policies coming out of Washington.

"I think most people thought that this was a good time to buy, and they wanted to get in before the interest rates started rising," said Daraius Irani, chief economist at Towson University's Regional Economic Studies Institute.

Sales growth has occurred most months this year, although less rapidly than in 2015, but the market shrugged off any slowdown in November, even as it entered what is typically the less-busy winter season.

"It was one of my best months of the year," said Tim Donohue, a branch manager for Marriottsville-based Corridor Mortgage Group. "Usually you're not dealing with that at Thanksgiving."

The growth in sales helped drive up prices, with the median rising 4 percent year-over-year, to $240,000. Median means half the homes sold for more and half sold for less.

Not including distressed sales, the median home price in the Baltimore region was $266,500, up about 1 percent from November 2015. That remains about 7 percent off the November peak in 2007.

Baltimore City, the least expensive jurisdiction, reported the sharpest percentage increase, with the median hitting $131,500, an increase of almost 21 percent from last year. Sales increased nearly 22 percent.

Live Baltimore, which works with the city to promote homeownership, has seen demand strengthen throughout the year, especially in less expensive neighborhoods, said Annie Milli, director of marketing for the nonprofit, which works with about one in seven of the city's residential buyers.

"It's showing a stronger interest in homeownership among buyers looking for a lower entry point," she said, describing it as a "very big month for the city."

First-time buyers are starting to become more active in the market, after years in which homeownership rates have declined, said Dean Cottrill, president of the Mid-Atlantic region for Coldwell Banker. That could bode well for next year, he added.

"There are a lot of people that have not purchased homes that moved into the rental market," he said. "There's pent-up demand."

Year-over-year sales growth ranged from 15 percent in Harford County to 26 percent in Anne Arundel.

The changes in pricing were more varied.

The median price increased in Baltimore County, rising 5.7 percent year-over-year to $215,000.

Howard County remained the most expensive jurisdiction, but the median declined almost 7 percent from November 2015, to $366,000.

The median price held steady in Carroll County at $269,900. It dipped less than 1 percent in Anne Arundel County, where the median was $296,000. In Harford County, the median sales price slid about 3 percent to $233,000.

The number of distressed sales, which include foreclosures and short sales, changed little across the metro region compared with 2015, according to the MRIS data. But the median price for those homes rose about 7 percent year-over-year to $123,450, driven by growth of such sales in Baltimore and Howard counties.

The number of homes on the market declined about 16 percent amid the buying activity, according to the ShowingTime RBI report. A typical home sold in November sat on the market for 40 days, eight days less than last year.

Andrew Strauch, director of marketing and product innovation for MRIS, said he expects inventory to expand if price increases continue and persuade more sellers to enter the market.

He said he does not think sales growth will be affected by rising interest rates over the long term, since he predicts increases will be modest, keeping rates low by historic standards. He said consumer confidence, employment and income growth will be the major drivers for next year's market.

"As the family's growing and they're comfortable with their jobs — that's when they're going to make purchases," he said.